Dropouts: Discouraged Americans leave labor force

WASHINGTON- After a full year of fruitless job hunting, Natasha Baebler just gave up.

She’d already abandoned hope of getting work in her field, counseling the disabled. But she couldn’t land anything else, either – not even a job interview at a telephone call center.

Until she feels confident enough to send out resumes again, she’ll get by on food stamps and disability checks from Social Security and live with her parents in St. Louis.

“I’m not proud of it,” says Baebler, who is in her mid-30s and is blind. “The only way I’m able to sustain any semblance of self-preservation is to rely on government programs that I have no desire to be on.”

Baebler’s frustrating experience has become all too common nearly four years after the Great Recession ended: Many Americans are still so discouraged that they’ve given up on the job market.

Older Americans have retired early. Younger ones have enrolled in school. Others have suspended their job hunt until the employment landscape brightens. Some, like Baebler, are collecting disability checks.

It isn’t supposed to be this way. After a recession, an improving economy is supposed to bring people back into the job market.

Instead, the number of Americans in the labor force – those who have a job or are looking for one – fell by nearly half a million people from February to March, the government said Friday. And the percentage of working-age adults in the labor force – what’s called the participation rate – fell to 63.3 percent last month. It’s the lowest such figure since May 1979.

The falling participation rate tarnished the only apparent good news in the jobs report the Labor Department released Friday: The unemployment rate dropped to a four-year low of 7.6 percent in March from 7.7 in February.

People without a job who stop looking for one are no longer counted as unemployed. That’s why the U.S. unemployment rate dropped in March despite weak hiring. If the 496,000 who left the labor force last month had still been looking for jobs, the unemployment rate would have risen to 7.9 percent in March.

“Unemployment dropped for all the wrong reasons,” says Craig Alexander, chief economist with TD Bank Financial Group. “It dropped because more workers stopped looking for jobs. It signaled less confidence and optimism that there are jobs out there.”

The participation rate peaked at 67.3 percent in 2000, reflecting an influx of women into the work force. It’s been falling steadily ever since.

Part of the drop reflects the baby boom generation’s gradual move into retirement. But such demographics aren’t the whole answer.